Video Blog

September 2013

September 30, 2013

Gardening by the sea here is very rewarding. We can grow anything in San Diego including plants that are native to this area. The native ecology is delicate but once it is achieved there are a lot of benefits to both the gardener and the environment according to Greg Rubin who taught at the 2013 Native Gardening Symposium in Balboa Park last Saturday.

The key is letting the microrhizomes do all the work, said the aerospace engineer turned native plant gardener. This includes any type of landscape : natural, formal, contemporary, mediterranean, or even japanese. Once the lawn has been turned into a meadow with natives (for one example) the owner saves money on watering, weeding, pruning, fertilizing.

This also has the effect of filtering storm water and keeping our ocean a lot cleaner.

Susan Krzywicki taught a class on creating an ocean-friendly garden with California natives. Here are some of her favorites (and mine) :

The organizer of the event, Jake Sibley produced this video showing the benefits and beauty of these gardens. His website is www.californiaplants.org and he will be producing more video tutorials on the subject.

For more specific examples of plants that thrive in San Diego, check out this book from Torrey Pines State Reserve.

September 19, 2013

The Wall Street Journal wrote an interesting series of articles this week taking a look at the last 5 years since the credit meltdown in 2008. The most amazing change is that 5 years since the financial crisis corporate borrowers are taking new loans again from investors who are hungry for returns.

In fact, according the the Journal, the most toxic of bonds, the subprime mortgage is alive and well and paying high returns to investors like Pimco because there are borrowers who are still making payments on their underwater mortgages. "Trapped" so to speak, in the securitized asset as they try to refinance at current rates but often fail because the holders of the bonds don't participate in a modification program.

But still demand for riskier debt is fueling growth. Population-adjusted output has just returned to it's precrisis level and wealth is rising again as Americans are spending less of their income on debt payments.

The biggest banks now have teams of regulators working with them in their offices and this has made the banks stronger. Firms such as J.P. Morgan are trimming way back on their investment banking business and focusing more on retail customers. They are letting their risky traders go to the hedge funds.

The lessons have been learned also by consumers who are considering borrowing again. They are analyzing the bet more carefully than in the past, taking into consideration the cheap borrowing rate, as well as the loan size relative to their investment portfolio.

September 02, 2013

A pull-back from the 2010 Dodd-Frank Wall Street Reform and Consumer Protection Act this week could mean good news for prospective homeowners who have been shut out of the tight credit environment.

The housing industry has worried that incenting lenders to require at least 20% down payment for all borrowers has limited the recovery and allows only the most qualified to purchase a home. They are very encouraged that last Wednesday six regulators including the Federal Reserve, FDIC and SEC proposed to widen the exemption of relatively low risk loans from the 5% rule. This rule requires banks and other issuers of mortgage-backed securities to retain 5% of the credit risk of the bonds on their books (otherwise known as "skin in the game").

They point out that mortgage misbehavior has stopped cold for the last six years since the crisis in 2009 and that going back to pre-bubble rules should be sufficient for a stable lending climate. The regulators cited as a principal reason to retreat from Dodd-Frank that credit is already far too tight.

The bottom line will be to watch default rates on new loans which currently are undetectable by historic standards.

Mortgage rates were just above 4.5% this week for most products. Pending home sales fell 1.3% in July but from a much improved level earlier in the spring. GDP was revised upward from 1.7 to 2.5 % annualized, but net of accounting fluxuations still around 2% - way under Fed's forecast, as is inflation, barely 1% annualized. Steady as she goes.